* Renewed confidence in economic recovery lifts oil
* Saudi oil min expects stronger global oil demand
* Technicals show oil may rebound to $90.10/bbl
(Adds Saudi oil minister's quotes, background, updates prices)
By Florence Tan
SINGAPORE, Jan 24 (Reuters) - U.S. crude futures held above
$89 on Monday on renewed confidence that developed economies are
recovering and will boost demand for commodities.
The rise in oil prices came despite a struggle by Asian
stocks outside Japan to hold on to earlier gains and a fall in
euro from a nine-week high.
"The sentiment is quite positive," Tetsu Emori, a
Tokyo-based commodities fund manager at Astmax Investments,
said, referring to signs of economic improvement in Europe and
in the U.S.
U.S. crude oil for March delivery rose 35 cents to
$89.46 a barrel at 0731 GMT, after posting a 2.65 percent loss
last week. ICE Brent crude for March rose 36 cents to
$97.96 a barrel.
Saudi Arabia's oil minister expects global oil demand to
rise between 1.5 million and 1.8 million barrels per day this
year, a more bullish forecast than those from OPEC and the
International Energy Agency.
Saudi is set to hold about 4 million barrels per day of
spare crude oil capacity in 2011, Oil Minister Ali al-Naimi,
OPEC's most influential member, said. The producer was sitting
on sitting on around 4.5 million bpd of spare capacity in 2009.
The IEA said last week that OPEC leader Saudi Arabia had
stealthily boosted output to cool an oil price rally.
Oil Minister Ali al-Naimi said he was worried about
speculators in the oil futures market driving market prices away
from fundamentals.
"The only thing I am concerned about is the pressure exerted
by speculators, analysts and some investors in the futures
market on prices to push them up or down, away from the market
fundamentals," he said.
HIGH INVENTORIES
Near record-high level of crude inventories at Cushing,
Oklahoma, the delivery point U.S. crude futures contracts,
depressed front-month futures and widened the gap against
European ICE Brent prices.
ICE Brent's premium to U.S. benchmark West Texas
Intermediate crude <CL-LCO1=R> reached $8.59 intraday on Friday,
its highest since February 2009, on tight North Sea crude
supplies and strong emerging market demand.
For a graphic on steep WTI contango, click:
http://graphics.thomsonreuters.com/AS/0810/UDS_20112401103638.jpg
Royal Dutch Shell said on Friday four North Sea
Brent oil and gas platforms, which shut down on Jan. 15, are
expected to remain closed for several weeks.
U.S. crude demand is set to fall with the onset of a peak
refinery maintenance season, Peter Beutel, president of U.S.
trading advisory firm Cameron Hanover, said in a note late
Friday.
"With the information that refineries had cut utilisation by
3.4 percent, the DOE (Department of Energy) signalled that
turnarounds have begun in earnest," he said.
Astmax's Emori said fundamentals in the oil market are still
much weaker than other commodities such as grains and metals.
"We don't see any tightness in the oil market at the
moment," he said, adding that the price gap between front and
back-month contracts may widen further.
However, traders will, at some stage, have to take profits
on the wide spread between Brent and WTI, Emori said, adding
that investors should remain cautious.
(Reporting by Florence Tan; Editing by Ed Lane)
